Apple sold 61.2m iPhones in the first three months of 2015, reporting revenues of $58bn as strong sales from China propelled the tech company to another record quarter.

The Californian tech giant was aided by strong sales of the new iPhone 6 and the larger iPhone 6 Plus in China during February’s Chinese New Year. Analysts polled by Bloomberg had expected Apple to sell 58.1m iPhones and for the company to report revenues of $56bn. The number far exceeded the 43.7m iPhones that Apple sold in the same period a year ago.

Revenue from China rose 71% to $16.82bn. That compares with $21.3bn in the Americas region, which was up 19%. Tim Cook, Apple’s chief executive, has previously predicted that China will become Apple’s largest market.

“We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever,” said Cook, announcing the company’s latest quarterly results after US stock markets had closed. “We’re seeing a higher rate of people switching to iPhone than we’ve experienced in previous cycles, and we’re off to an exciting start to the June quarter with the launch of Apple Watch.”

On a call with analysts Cook said the company had an “incredible quarter” in China driven in large part by iPhone sales. Sales of Macs rose 31% in China. Cook said the company had benefitted from an expansion of its physical retail and online presence in the country.

“I’ve never seen as many people coming into the middle class as I have in China and that is where the bulk of our sales are going,” he said.

With a net operating profit of $13.6bn, a 33% increase, the only fly in the ointment is the continued decline of iPad sales, off year-over-year for the second quarter running as smartphones with larger screens – including the 6 Plus – become more widely adopted.

Cook said he believed the iPad business was an “extremely good business over the long term” and said that sales had hit an all-time high in China.

The company ended the quarter with $193.5bn in cash. Activist investor Carl Ichan ended a campaign to force Apple to hand back more money to shareholders last year. But it seems that Cook was listening.

Apple announced an 11% increase in its dividend on Monday and the addition of another $50bn to its share buyback program. The company will now return $200bn to shareholders by March 2017.

The numbers paled in comparison to last quarter of 2014 when Apple sold a record 74.5m iPhones. Those sales underpinned $18bn in profit for the quarter, the largest in corporate history. But the end of the year is traditionally Apple’s best month thanks to Christmas sales.

“It’s tough to find something in the numbers not to like,” said Cook.

The latest numbers do not include Apple Watch, which was available for pre-orders on 10 April and went on sale on 24 April. Cook said customer response had been “overwhelmingly positive”.

“Right now demand is greater than supply so we are working hard to remedy that,” he said. “We’re ahead of where we expected to be from an application point of view.”

Slice Intelligence, which compiles sales estimates from an online survey panel, has estimated close to a million Apple Watches were pre-ordered in the US on the first day they went on sale. Estimates for the popularity of the watches have varied widely with analysts predicting the company could sell between 16m and 60m in the first 12 months.